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I calculate that the sex scandal that has engulfed Penn State and its legendary football coach, Joe Paterno, is going to cut the value of the school's football program by at least $10 million.

I won't get into the specifics of the allegations facing the football team's former defensive coach, Jerry Sandusky, Penn State athletics director Tim Curley and Vice President for Finance and Business Gary Schultzand, or what Paterno should or should not have done when he was apparently told by someone who allegedly witnessed Sandusky in action. My colleague Patrick Rische does a fine job of covering that here.

Instead, let's look at what all this means for the value of Penn State's football program.

When we last calculated the values of college football's top teams almost two years ago, Penn State ranked third at $99 million. Our valuations are based on what the football program contributes to four important beneficiaries (in order of weight): money generated by football that goes to the institution for academic purposes, including scholarship payments for football players; the net profit generated by the football program retained by the department; the distribution of bowl game revenue to other teams in the conference; and estimated incremental spending by visitors to the county that's attributable to the program.

In the case of Penn State, the school had moved up to third from 13th the previous time we valued college football teams on the strength of $66 million of total revenue (fourth-highest) and $50 million of profit (second-highest). Included in revenue is $4.25 million from playing in the Capital One Bowl $14 million from the Nittany Lion Club and $14 million in media revenue.

Economic upshot for football team: The hardest hit revenue streams near term are likely to be alumni donations, say sports consultants, who conservatively estimate that the football program could see a $10 million drop in revenue from alumni and sponsorships next year, and a further decline in subsequent years if the team loses top high school recruits, its play suffers on the gridiron and does not make the lucrative bowl games.